a penalty on the use of the river, which would be a catastrophe for us people using the river, to find our insurance costs would not be competitive with any other port.

Senator ELLENDER. Is that loss of life and loss in property indicating the total sustained over 2 years?

Mr. SCHAD. Three years. All of these years are in the book, sir. Senator ROBERTSON. Have these facts been presented to the House Subcommittee on Civil Functions?

Mr. SCHAD. Yes, sir. We did that 2 weeks ago.

I would like to go to the dollar figures. While we seem to be a little confused, we do know the engineers have said we need $8,400,000 to restore the channel. We understand $2,150,000 is in the budget, so we are asking for an additional $6,250,000. Once they get it down to depth, then $3,250,000 would be needed to maintain it.

Talking with General Itschner here this morning, he has said, and the mayor has repeated to you, that they could spend only $4 million in the next fiscal year. With apologies to the general, I question that because so much of their dredging equipment is laid up. If they brought that dredging equipment out and put it to work, I personally think they could spend close to the $8 million.

WASTE DISPOSAL

Senator ROBERTSON. Is there any problem involved in waste disposal? If you dredge the silt out, have you a place to put it? Mr. SCHAD. Yes, sir.

Senator YOUNG. You are really worse off than you indicate. There is $1,985,600 in the budget for this coming year where you are using the figure $2,150,000.

Mr. SCHAD. That seems to be a confusing point. We got our figures from the Corps of Engineers.

Senator YOUNG. That is an amount that is in the budget for the year we are operating on now?

General ITSCHNER. That is correct; $2,150,000 is the amount for the current fiscal year and $1,985,600 is the amount for the coming fiscal year.

Senator YOUNG. If the House cuts you and the Senate cuts your overall budget more, you will still be in worse shape.

Mr. SCHAD. Yes, sir. I was going to say something about the attitude of the engineers, but I think General Itschner has stated very clearly that they are sympathetic to us. They want to do this job. It is a case of having money.

I though you would like to see a picture of what happens when these big ships come together. These two ships collided. This one on the right blew up. This ship is on fire [indicating]; lives were lost. The property damage was tremendous.

Senator ELLENDER. Didn't this happen in this bay?

Mr. SCHAD. Up in the river.

Senator ELLENDER. How far up the river?

Mr. SCHAD. About 55 miles from the bay. It was just south of Wilmington, Del.

Senator ROBERTSON. Do all the ships using this channel have to take on a local pilot?

Mr. SCHAD. Those trading coastwise would not have to if the pilot has a license. Any ships trading American or foreign does.

Senator ROBERTSON. Who controls the fees the pilot association charges?

Mr. SCHAD. The legislatures of the States.

Senator ROBERTSON. Are those fees fixed on the basis that is satisfactory to the shippers?

Mr. SCHAD. Yes, sir.

That is all I have, Mr. Chairman.

Senator YOUNG. Thank you.

The next witness is Mr. Walter Miller.

STATEMENT OF WALTER P. MILLER, JR., PRESIDENT, CHAMBER OF COMMERCE OF GREATER PHILADELPHIA

PREPARED STATEMENT

Mr. MILLER. I have a prepared statement I would like to file.
Senator YOUNG. It will be placed in the record.

(The statement referred to follows:)

THE ECONOMIC IMPORTANCE OF THE PORT OF PHILADELPHIA

Presentation by Walter P. Miller, Jr., president, Chamber of Commerce of Greater Philadelphia

The port of Philadelphia is in reality five river ports centering on the cities of Philadelphia, Camden, Trenton, Chester, and Wilmington. This is a 60-mile stretch of river which serves as the loading and unloading terminus of shipping which plies the 7 seas.

Three major railroads, the Pennsylvania, the Baltimore & Ohio, and the Reading, supply low-cost service; while a network of modern highways, including the brand new Pennsylvania and New Jersey turnpikes, supply the rapidly expanding trucking interests with ready access to this port area.

Just 90 miles to the north are the fabulous markets of New York and northern New Jersey; while 90 miles to the south lies Baltimore, gateway to the thriving South Atlantic States. The port of Philadelphia stands ideally located, a good 60 miles inland from the Atlantic Ocean and within easy rail and truck transport to the richest concentrated markets of the United States.

The Greater Philadelphia-Delaware-South Jersey region is enjoying a longterm industrial expansion of spectacular proportions. This has been spearheaded in recent years by United States Steel's huge Fairless works at Morrisville, just now getting into full operation at a rate of capacity of 2,200,000 tons per

annum.

Factory industry is building plants and buying new equipment at a faster rate than in 1953; and commercial construction is keeping pace.

Let the facts speak for themselves. Accompanying this statement is a copy of an 84-page book, Greater Philadelphia Facts-1953, recently published by the Chamber of Commerce of Greater Philadelphia. I draw your attention to the pullout map facing page 18 and the text on page 19. Here as pictured item by item is an expansion from 1945 to 1955 of nearly $3 billion in major capital im provements along both banks of the Delaware River. These capital investments. have been made or are scheduled by the diversified industries of the area. The total includes related public works. All listed projects are for $5 million or more. Were it possible to include the smaller projects, the total of such capital investment would be increased by many hundreds of millions of dollars.

Now I ask you to turn to page 56 to see why we boast that the city of Philadelphia is the hub of concentrated industry and commerce in the United States. Within this 100-mile circle pinpointed at Philadelphia are 22 million people, or more than you can encompass within any similar 100-mile circle elsewhere in the United States. Were you to draw the circle around New York City, you would include Philadelphia but no city the size of Baltimore to the north. Boston is more than 200 miles away.

It is thus a matter of fact that Philadelphia serves the Nation's largest market to be found within a 100-mile radius. This fact has only become widely known and understood in recent years, but such knowledge is now responsible for an ever-increasing flow of industrial and wholesale establishments into the Philadelphia area.

As a result, population is expanding apace.

May I refer you just once more
Here in diagram and table you

to the Philadelphia facts book, pages 48 and 49. have the area's growth record since the beginning of the century and the projection to 1960.

For the 11 counties of Greater Philadelphia (Philadelphia, Bucks, Chester, Delaware, and Montgomery in Pennsylvania; New Castle in Delaware; and Burlington, Camden, Gloucester, Mercer, and Salem in New Jersey), the population was just over 2 million in 1900. It passed the 3-million mark in 1920, the 4-million mark in 1950, and will top 5 million in 1960.

The port of Philadelphia is the main artery of this rapid expansion. It is a growth up and down both banks of the Delaware River, such a growth as to cause centrally located pier sites to become scarce. Both the Philadelphia area and the United States are becoming more and more dependent on intercoastal trade (such as in oil products) and on international trade (such as in iron ore and steel products). To breathe and to continue its phenomenal expansion, the port of Philadelphia must be modernized. The Delaware River must be dredged to a depth that will accommodate the huge oceangoing oil and ore carriers of today and tomorrow.

Gentlemen, the maintenance of a 40-foot channel from the mouth of the Delaware River to Philadelphia was authorized by Congress in 1938. At this time, we ask simply that the Federal Government complete what it set out to accomplish. Within a few years' time, an even deeper channel may well be necessary to accommodate ocean vessels now in the blueprint stage. As of today, a 40-foot channel to Philadelphia is an absolute must, a minimum requirement.

Speaking from a business point of view it is a well-known rule of thumb that if an investment is returned in 3 years it is a sound expenditure of capital funds. However, in the case of the Philadelphia port the expenditure of funds to maintain the channel at its authorized depth will be returned, in customs receipts alone, approximately 6 times over within 1 year.

It should be noted that much of the expenditure is required for what amounts to deferred maintenance. Any businessman knows that permitting a facility to fall into a condition where it cannot produce efficiently is a striking example of bad management. It is therefore self-evident that this important facility for the commerce of the United States of America should be returned immediately to its full productive capacity.

In addition, the job opportunities which this work will provide in the Delaware Valley will return substantial sums in taxes to the Federal Government.

Certainly, there can be no doubt that the expenditure required to maintain the Delaware River Channel at its authorized depth is a good investment.

GENERAL STATEMENT

Mr. MILLER. There are a few points I would like to emphasize. There has been a tremendous industrial expansion going on in the Philadelphia area, particularly in the area of the metal-working industries and the oil industry. There has been accompanying that a considerable growth in population. All of these things give an additional emphasis to the importance of the port of Philadelphia.

I would like to say that the maintenance of a 40-foot channel—I repeat-was authorized in 1938. At this time we are asking only that the Federal Government should accomplish what it set out to accomplish. I do think that within a few years' time an even deeper channel is necessary. As Mr. Schad has noted, the size of the vessels carrying oil and iron ore are increasing. As president of the Chamber of Commerce of Greater Philadelphia, which is the capacity in which I appear here today, I speak from a business point of view. It is a wellknown rule of thumb in business that an investment of capital funds

that will pay in 3 years is a pretty good idea and that you probably should go ahead and do it.

In the case of the Philadelphia port, the expenditure of funds to restore the channel to its authorized depth will be returned approximately 6 times within 1 year. After it is restored, the necessary annual maintenance expense would be returned approximately 15 times. I would note further this is from customs alone and is in addition to the job opportunities which the river does provide in the Delaware Valley and which also returns substantial sums in taxes to the Federal Government.

DEFERRED MAINTENANCE

I think it should be further noted that much of the expenditure that we are talking about here today is required for what you might call deferred maintenance. 1 am well aware of the necessity of an economy program in the Federal Government, in our local government, but any businessman knows that permitting a capital asset, which the river is, to fall into a condition where it cannot produce sufficiently, is a striking example of bad management and is not an

economy.

I think, therefore, it is self-evident that this important facility for the commerce of the United States should be returned immediately to its full productive capacity.

Certainly there can be no doubt that the expenditure required to restore and maintain the Delaware River Channel at its authorized depth is a good investment. The Chamber of Commerce of Greater Philadelphia, and I also represent the Greater Philadelphia DelawareSouth Jersey Council which is an area body, authorized me to respectfully request that you should appropriate these necessary funds and thereby honor the commitment made in 1938.

Thank you, gentlemen.

Senator ELLENDER. Is it very expensive to maintain the depth at the port itself in Philadelphia?

Mr. MILLER. I think that the Army engineers could probably give you a better opinion. I would think it would be no more difficult. Senator ELLENDER. Is that a separate appropriation, to maintain the facilities at the port?

General ITSCHNER. No, sir. It is all one. It is pretty much the same throughout the length of the river.

Senator ELLENDER. How much of this is spent to maintain the depth at the port? Would you be able to tell?

General ITSCHNER. I am sure it varies every year, sir, but I cannot tell you exactly what it is. It varies considerably.

Mr. CLARK. While we are very much interested in the Philadelphia angle, it is all one big port because these wharves start up the bay and they go all the way to Trenton. It is on both sides of the river and we claim it all for Philadelphia.

Mr. MILLER. It is a 60-mile stretch of river we are talking about, all of which is commercially used.

Senator ROBERTSON. What is the total length of this channel from the entrance up to Philadelphia?

Mr. MILLER. It is approximately 60 miles.

Mr. SCHAD. It is about 85 miles, if I may say so.

Senator YOUNG. The next witness is Mr. Walter Phillips.

STATEMENT OF WALTER PHILLIPS, APPEARING ON BEHALF OF THE ADMINISTRATION OF THE CITY OF PHILADELPHIA, PA.

GENERAL STATEMENT

Mr. PHILLIPS. Philadelphia has a new city charter which provides for a department of commerce. One of the functions of the department of commerce is to maintain the wharves and do the dredging around the piers and to promote commerce generally. In connection with promoting commerce and our interest in the economy of Philadelphia, I would like to bring out the fact the oil industry has invested a half billion dollars further funds in oil refineries since World War II. In other words, it would not be possible for these oil tankers just to go to New York; they have to get the crude oil to these refineries which have been built at great expense along the Delaware.

Furthermore, there will be $150 million further investment made in the refineries during 1954. All of this investment was made on the assumption that the United States Government would stand by its commitment to maintain a 40-foot channel.

Senator ELLENDER. What percentage of your crude oil that is refined is brought up the river?

Mr. PHILLIPS. All of it.

Senator YOUNG. Where does the crude oil come from?

Mr. PHILLIPS. Mostly Texas, but also from foreign countries.

If this expansion is completed in 1954, we will have a capacity of 612,000 barrels a day. That will reach 707,000 barrels a day when the 1954 expansion is completed. That is 10 percent of the entire national product.

Mr. SCHAD. We have two pipelines that deliver crude oil up there, such as in Louisiana. It must come in by these big ships.

Senator ELLENDER. Those refineries are almost as big as the Standard Oil plant located in Louisiana.

Mr. PHILLIPS. Most of the oil products are marketed in the 5- or 6State area, so there is no competition with New Orleans.

This channel shoaling means that we have actually an effective depth of perhaps 35 feet in the center of the channel for only a 400foot width, although it is supposed to be an 800-foot wide channel. New York's channel is 1,500 feet wide. What causes these accidents are the ships hugging the center of the channel. Even though they do get in by floating up on the tide, it is a very hazardous condition and a condition that must be remedied if the oil industry and all the other activities that go with it are to continue to grow in this Delaware Valley.

DEFENSE ASPECT

In closing, I would like to point out that there is a defense aspect of this which is very serious. Should we have another incident such as Korea-and I hope there will not be one where the atomic bomb is used, but if there is another war like Korea where it is a test of economic strength-the productivity of this region is going to be very important. You have aviation fuel. You have to get your oil in to keep the rest of the industry going and the population thriving so they can produce. Also, you have basic steel located there now. The